Posts tagged with: U.N.

Yesterday it was announced by the State Department that the United States will provide an additional $105 million in aid to famine-stricken East Africa (we had previously contributed $405 million to fight drought in the region). Vice President Biden’s wife has just returned from a humanitarian visit, where she visited a camp of starving refugees and met with Kenyan leaders who are dealing with an influx of famished Somalis. Said Jill of her trip,

One of the reasons to be here is just to ask Americans and people worldwide, the global community, the human family, if they could just reach a little deeper into their pockets and give money to help these poor people, these poor mothers and children.

And another U.S. official: “Hundreds of thousands of kids could die.”

Somali Militiaman

This is madness. The United States has funneled untold millions of dollars into Somalia over the years, and the situation is exactly the same: the country is so war-torn that aid we send doesn’t get to the children it’s supposed to help. According to Transparency International, Somalia is the most corrupt country in the world. The U.N.’s top humanitarian officer in the country admitted that aid reaches only 20 percent of needy Somalis, although in the capital, he said, the situation is better; there aid reaches about half the city’s inhabitants.

But there’s a deeper problem—one that the U.N. official doesn’t see, even though he’s surrounded by the data. It shouldn’t be that 50 or 60 or 70 percent of Somalis are considered perpetually “in need,” to be propped up by colonialist aid from the U.S. and Western Europe. In fact, it is exactly that dependent relationship that has rendered Somalia helpless in the face of drought. (Compare it with Texas, for example, where a majority of the state’s crops have been severely damaged by a record drought.)

The question arises then, what if we didn’t send the aid? To be frank, we don’t know the answer to that—the European Union and other countries also send substantial amounts to Somalia, but no one really knows how much food gets to refugees. All that Jill Biden can say is, “There is hope if people start to pay attention to this.”

Somalis don’t need another 20 years of U.S. handouts. They need a civil society and the opportunity to enter into exchange with the developed world. As easy as it is for America to throw money at their problems, that kind of aid can’t really help.

For more on Acton’s solution to global poverty, visit, where you can sign our Statement of Principles and hear from people who have made a difference in Africa.

To provide water for people, communities have usually turned to  two different options: public or private utilities. However, if Bolivian President Evo Morales, leader of the Movement Towards Socialism Party, gets his way, the United Nations will pass a resolution blocking the sale of public water utilities to private companies. If adopted, this resolution will cause problems for many nations, especially the undeveloped countries receiving support from the U.N. that will be forced to abide by one option—public supply of water—instead of being permitted to consider privatization which may be more efficient and cost effective.  The makes the global water crisis much worse.

It will not help any country to limit its options when searching for the most efficient and cost effective solutions for providing a clean, sanitary, and abundant source of water.

Theories and examples in support and against both private and public water utility systems are numerous. A study conducted by the University of Michigan showed that water prices, in general, are too low. The study explains that direct and indirect subsidies, in both developed and undeveloped countries, have caused low prices, resulting in water waste. Furthermore, the study argues that if the subsidies are removed, the price of water will increase and provide an incentive for those utilizing water to not waste it. This, in turn,  will result in the investments that are needed to develop more efficient technologies. If subsidies are removed, then a lighter burden is placed on public funds.

Lending support to the findings of the University of Michigan study, a survey conducted in 2004 by Global Water Intelligence found that the under-pricing of water is widespread. The study analyzed the prices charged by water utilities in 132 major cities worldwide and found that 39 percent of water utilities had average tariffs that are set too low to cover basic operation and maintenance costs. Some 30 percent had tariffs that are set below the level required to make any contribution toward the recovery of capital costs.

Changing the price system may be a solution. Some argue for a metering that charges water users based on consumption. However, while subsidies are proving to be largely inefficient the question must be asked: Can those in undeveloped countries, who are already living in a state of grave poverty, afford increased prices on water?

The International Development Association and the World Bank are quick to point out the success of private water utilities. Examples can be found in Rwanda and Mozambique where the private sector helped provide, improve, and/or expand the water supply. The U.N. has acknowledged five reasons to pursue private sector partnerships.

A private sector supply of water can be more efficient and cost effective. According to the World Bank, it is estimated that in the United States each dollar of public funds raised for utilities has an opportunity cost of $1.30 of private consumption, and the average opportunity cost for each dollar of tax revenue raised is $1.17 for 38 African countries.

Critics of the privatization of water argue that while it is more efficient and cheaper, the private systems fall short of social equity in supplying water and charge higher prices. While there have been unsuccessful stories of privatization, the aforementioned examples in Rwanda and Mozambique are a just a few of the many success stories, and, as The Economist notes, when private utilities charge higher prices, that often corresponds to higher rehabilitation investments, better water quality, and better service.

Privatization will also promote the decentralization of  government, and in the case of many developing nations, remove the control of water out of the hands of corrupt bureaucrats. A large overarching centralized government is not needed. Instead, the principle of subsidiarity should be applied.

Private entities are able to supply an efficient and cost effective supply of water. Privatization is an effective solution, and its ability to meet the needs of consumers has improved. As a result, water supply can follow the principle of subsidiarity by utilizing other alternatives to supply water instead of through a system brought forth by a centralized government.

It is important to note that just as public utilities are open to corruption, inefficiencies, and poor management, so is privatization. Privatization can fall subject to a corrupt government. The example of Detroit is instructive here. For example, when a government decides to contract a private utility to supply water, instead of having an open bidding process, the government accepts no outside bids and picks a company that is owed a political favor. If privatization is to succeed government must take the appropriate actions to allow it to succeed and also nurture an environment that is open to decentralization, promoting business without unnecessary government interference.